Energy and Financials Lead Weekly Gains, But Investors Pour Capital into Lagging Tech Sector

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For the week ending August 22, 2025, the U.S. Sector & Industry ETF landscape, comprising 258 funds from 52 issuers with a total of $800 billion in assets under management, showcased a significant divergence between performance and investor sentiment. Cyclical sectors like Energy and Financials posted the strongest weekly returns, continuing their recent run of positive performance. However, fund flow data revealed a contradictory trend, as investors directed the largest share of new capital into the week’s worst-performing sector, Information Technology. Meanwhile, the top-performing Financials sector experienced the most significant outflows, suggesting investors may be taking profits or repositioning ahead of future market catalysts.

Weekly Performance Recap: Cyclicals Outperform as Tech Falters

The market saw a clear preference for cyclical and value-oriented sectors this week, with Energy leading all groups on the back of strengthening commodity prices. Financials and Real Estate also posted robust gains. In contrast, the technology and communication services sectors, which have been long-term market leaders, ended the week in negative territory, pausing their upward momentum.

Sector Performance (Week-to-Date):

  • Energy: 3.27%
    • Top ETF: PXJ (Invesco Oil & Gas Services ETF): 6.72%
    • Bottom ETF: COAL (Range Global Coal Index ETF): -2.75%
  • Financials: 2.76%
    • Top ETF: QABA (First Trust NASDAQ ABA Community Bank Index Fund): 5.67%
    • Bottom ETF: IAI (iShares U.S. Broker-Dealers & Securities Exchanges ETF): 0.63%
  • Real Estate: 2.67%
    • Top ETF: RDOG (ALPS REIT Dividend Dogs ETF): 4.84%
    • Bottom ETF: HAUZ (DBX ETF Trust – Xtrackers International Real Estate ETF): 0.93%
  • Materials: 2.45%
    • Top ETF: DVXB (WEBs Defined Volatility XLB ETF): 4.12%
    • Bottom ETF: PYZ (Invesco Dorsey Wright Basic Materials Momentum ETF): 1.25%
  • Consumer Discretionary: 1.82%
    • Top ETF: PSCD (Invesco S&P SmallCap Consumer Discretionary ETF): 2.82%
    • Bottom ETF: RTH (VanEck Retail ETF): 0.55%
  • Health Care: 1.66%
    • Top ETF: XHE (SPDR S&P Health Care Equipment ETF): 3.56%
    • Bottom ETF: MEDI (Harbor Health Care ETF): 0.07%
  • Industrial: 1.58%
    • Top ETF: BOAT (SonicShares Global Shipping ETF): 3.99%
    • Bottom ETF: EUAD (Select STOXX Europe Aerospace & Defense ETF): -1.15%
  • Consumer Staples: 1.48%
    • Top ETF: PSCC (Invesco S&P SmallCap Consumer Staples ETF): 3.66%
    • Bottom ETF: GXPS (Global X PureCap MSCI Consumer Staples ETF): 0.32%
  • Utilities: 0.66%
    • Top ETF: PSCU (Invesco S&P SmallCap Utilities & Communication Services ETF): 2.78%
    • Bottom ETF: UTES (Virtus Reaves Utilities ETF): -0.96%
  • Communication Services: -0.16%
    • Top ETF: RSPC (Invesco S&P 500 Equal Weight Communication Services ETF): 1.29%
    • Bottom ETF: GXPC (Global X PureCap MSCI Communication Services ETF): -0.91%
  • Information Technology: -0.25%
    • Top ETF: PSCT (Invesco S&P SmallCap Information Technology ETF): 3.51%
    • Bottom ETF: DVXK (WEBs Defined Volatility XLK ETF): -2.65%

Weekly Flows Summary: Tech and Health Care Attract Capital Despite Mixed Performance

Despite underperforming for the week, Information Technology ETFs were the clear favorite among investors, attracting nearly $1 billion in net new assets. The sector, which holds the largest AUM at over $300 billion, saw broad interest, particularly in semiconductor-focused funds. Health Care also saw significant inflows. On the other end of the spectrum, Financials led outflows with over $680 million in redemptions, followed by Communication Services and Industrials, as investors appeared to cash in on recent strength in these areas.

Largest Individual ETF Flows (5-Day):

Inflows:

  1. XLV (Health Care Select Sector SPDR Fund): +$341M
  2. VGT (Vanguard Information Technology ETF): +$275M
  3. SMH (VanEck Semiconductor ETF): +$236M
  4. SOXX (iShares Semiconductor ETF): +$209M
  5. XLK (Technology Select Sector SPDR Fund): +$117M

Outflows:

  1. XLF (Financial Select Sector SPDR Fund): -$609M
  2. XLC (Communication Services Select Sector SPDR Fund): -$365M
  3. IYR (iShares U.S. Real Estate ETF): -$255M
  4. XLI (Industrial Select Sector SPDR Fund): -$242M
  5. XLE (Energy Select Sector SPDR Fund): -$153M

Issuer and Product Landscape

The sector ETF market remains concentrated among a few major players. The top three issuers by assets under management are SPDR (42.61% market share), Vanguard (25.84%), and iShares (16.25%). For the week, VanEck captured the largest net inflows with +$229 million, driven by strong demand for its semiconductor products. In contrast, SPDR experienced the largest net outflows, shedding $1 billion in assets. The product landscape continued to expand, with 20 new ETFs launching in the past three months, led by issuer WEBS with 11 new funds. During the same period, two funds were closed, one each from First Trust and Range.

For a detailed breakdown of all data, including individual fund performance and flows, please refer to the full ETF Action weekly sector & industry reports.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.

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